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Russian Prime Minister visits Beijing.
Which areas of China-Russia cooperation will go deeper from here?
Germany's foreign minister caught China and reaffirmed the one-China principle.
How can Berlin avoid microphone diplomacy while engaging with Beijing?
And Turkey hosts summit on Gaza, says Israel must stop ceasefire violations.
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Chinese President Xi Jinping has called for safeguarding and advancing China-Russia relations, saying it's a strategic decision by the two sides.
He made remarks during a meeting with visiting Russian Prime Minister Mikhail Mishustin in Beijing.
President Xi suggested the two countries maintain close coordination, implement the major consensus reached between the two heads of state, expand practical cooperation and make new contributions to global peace and development.
The Russian prime minister said his country is ready to deepen cooperation with China in areas including economy trade, science and technology and energy, while also strengthening coordination on multilateral platforms.
So to delve into this and the Russian prime minister's visit in China, let's have Professor Cui Hongjian with the Academy of Regional and Global Governance at Beijing Foreign Studies University.
Professor, it's been a busy season for big power diplomacy.
Right after President Xi and President Trump's meeting in Busan, we've now got the Russian Prime Minister in China, meeting both Premier Li Keqiang and President Xi.
What do you make of the timing and reasons behind this visit?
First of all, as we know, this visit by Russian prime minister and also the consultation or the meeting between our two prime ministers from both the country is a very, very traditional exchange between two countries and the two governments.
So it showcased these relations between China and Russia always on a very high level and get a stable and closer cooperation.
But, of course, if we take a consideration about the timing, especially the interaction between China and the US, between China and Russia and even earlier the US and Russia meeting, we can find out China is trying to take the opportunity, try to strengthen this stable interaction or engagement between major players.
I think it's interesting and also in the purpose of China, to have a stable and predictable major player relations, especially with Russia and with the United States.
So I believe that this kind of interaction, especially in a belying way, will contribute to the stability of a global situation and even could make some joint efforts from major players to help the stability and development for the international community.
We know, the Russian prime minister led a high-level delegation and signed multiple cooperation agreements with China.
Which areas of China-Russia cooperation do you think will go deeper from here, and which one you are watching the most closely?
As we know so far, China-Russia relations have a very, very comprehensive development.
On the basis of a traditional cooperation on energy and infrastructure.
Certainly, this time, I think, those two countries try to explore some more new areas for cooperation.
If we take a look on these areas, including transportation and also especially the Arctic ship line development, I think now Russia is trying to get some more cooperation with China's counterpart and to promote this cooperation and to get some more, I mean, diversity of trade and especially transportation.
Secondly, how the digital economy and AI and some other technological innovation, even this time, as we know that China, is not sure, will open some laboratories on digital and AI.
I think it will be a very, very potential area for cooperation between two countries.
And then even for some other areas like financial and investment.
Certainly I think it's a two countries cooperation will input some more new dynamic for the cooperation between two countries.
Indeed, these agreements reflect both the depth and breadth of bilateral cooperation.
As earlier you mentioned, in the field of science and technology, a global focal point, China and Russia announced plans to jointly build several research labs.
Which specific areas, such as artificial intelligence, aerospace or biotechnology, do you see as potential new growth engines for bilateral collaboration?
Certainly, as we know, for a long time cooperation between China and Russia at the very beginning for both countries.
They do have a complementary cooperation on energy and also some other trade areas.
But in recent years, because of a huge change of the world economy and also global scientific technological tendencies, I think at this time it will be some new stage for this cooperation between two countries.
Those specific areas such as AI, aerospace or biotechnology.
I think it will provide some more new potential for both countries.
As we know, on these areas, China has its own technological advantages.
I think now China is trying to shape a new model of a corporation in complementary way.
So I think China has its advantage technology on the AI and it will be helpful for Russia to upgrade its manufacturing and also some other areas.
So, besides this traditional corporation, I do believe this emerging and new cooperation will provide a wider vision for cooperation.
Professor, let's talk about the human side of this.
As an expert who has long observed China-Russia relations, any memorable moments or stories from your own experiences?
And how have they shaped your views on the future of China-Russia relations?
Cultural exchange and the people-to-people contact provide a very, very important and also substantial basis for this cooperation between China and Russia.
According to my experience and memories, as we know, both China and Russia, we are neighbors.
So how could we get along with each other in a friendly way?
It gives a very, very important and also interesting experience for this exchange between two peoples.
As we know now, there is a ways of free policy from China for Russian citizens.
I think it gives more opportunities for both two peoples to get a mutual understanding and then to promote the mutual perception.
So indeed, I think that most Russian people they are friendly to China and they want to know something more about China.
And in China, yes, we do have a lot of people.
They do have, you know, very, very good feelings to Russian people.
I think this people-to-people and the cultural exchange will also give a very, very important dynamic for sustainable and also friendly relations between two countries.
Then, looking ahead, how do China-Russia ties fit into each country's bigger national goals, like China's modernization drive or Russia's new development framework?
To have some more strategic exchange and to improve the strategic mutual trust, always a very, very important part for China-Russia relations.
As we know, as two big countries with long history, certainly to respect with each other and to appreciate each other's culture and civilization will provide a very, very important and valuable guideline for these relations.
As we know now, China is implementing its Chinese modernization.
And not only just China, will try to showcase some more its own characteristics.
At the same time, China also needs to get some more exchange and also some more cooperation with other countries with other cultures and civilizations.
So I think this strategic exchange and to get some more and more underlying mutual understanding between China modernization and Russia's new development framework will be very, very useful for this improving strategic mutual trust.
One last question, Professor.
Let's move back to the geopolitical context and great power dynamics.
Many say this trip comes at a tricky time.
US-Russia ties are tense again after the Alaska summit, while the Xi-Trump meeting brought a bit of calm to China-US relations.
How do you see this three-way dynamic playing out between Beijing, Moscow and Washington today?
Nowadays we are living in a world and on one side yes, there are more and more kills and also some negative impact from this competition or even confrontations.
In this regard, I think for every major players, especially China US Russia, they should take some more responsibilities and to help the stability of the international order.
Also, we know that from Chinese policy, from Chinese purpose, always to establish a framework for the major players and to get the stability and the relying exchange or engagement will be not only in the interest of China, Russia and the US, even it's in the interest of the international community.
Once China, Russia and the US could try to make joint efforts to support a stable exchange and frequent engagement and a more and more mutual understanding.
I think it will be very, very important for this change today, but of course, i think at the same time, china will try to invest something more into the relations with other major players.
But of course i think for both china, us and russia, they also need to have some more consensus on how to manage crisis, how to stop any conflict on regional and the global level.
So I believe that this year, especially recent days, could be a very, very important starting point for every major players to shape some more new consensus and to make some more joint efforts and to to get some more common interests.
Thanks, Professor, for those valuable insights.
That was Professor Cui Hongjian with Academy of Regional and Global Governance at Beijing Foreign Studies University.
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Chinese Foreign Minister Wang Yi has held a phone conversation with his German counterpart, Johann Waterfall.
Wang said an important lesson from the development of China-Germany relations is mutual respect and that the guiding principle should be win-win cooperation.
He noted that maintaining the sound momentum of bilateral ties serve the interests of both countries, meets the expectations of all sides and contributes to global peace and stability.
Wang also stressed that one China principle remains the most important political foundation of China-Germany relations.
For his part, the Germany foreign minister said his country is ready to strengthen exchanges with China in various fields, properly manage differences and promote the Germany-China comprehensive strategic partnership, adding that Germany's commitment to the one-China policy remains unchanged.
So for more on this and China-Germany and China-EU ties, let's bring in Helga Zepp-Larouche, founder of the Schiller Institute, a Germany-based political and economic think tank.
Thanks for joining us, Helga.
Yes, hello.
Nice to talk to you.
After calling off his visit to China, the German foreign minister later took the initiative to request a phone conversation and reaffirmed Germany's commitment to the one China policy.
How do you interpret this shift in attitude and what considerations might have driven this change?
Well, I think Foreign Minister Wadephul got a storm of criticism both from within his own party, the CDU CSU, but mostly also from the industry, because China is the most important trading partner of Germany and the German economy right now is in extreme difficulty, one can actually say in a free fall.
So Germany should not do this, because we can't afford to ruin relations to our most important trading partner.
So it was a major blunder.
And now the German media, like the Focus magazine, for example.
They say that Vadefuhl has been putting his foot in the mouth, in his mouth at every possible occasion.
And they're even comparing him already to Annalena Baerbock, the previous foreign minister, who was generally regarded as a catastrophe.
So I think that that environment caused this shift.
Helga.
During the call, Foreign Minister Wang Yi said that China and Germany should avoid engaging in what he described as microphone diplomacy.
How do you understand this term?
And, in your view, how can both sides ensure that differences are addressed in a professional and a pragmatic manner, rather than being manipulated or amplified by the media, for example?
Well, I think that this recent event demonstrates a more general problem we see in many parts of Europe where the politicians are talking to an internalized audience which is very detached from what goes on in reality.
And that has, as the whole world is discussing right now, led to a far-reaching self-isolation of Europe on the international stage.
I think it is very urgent for Europe to reflect back on the art of diplomacy.
Diplomacy is an art.
It has to be learned.
It's how to take into account the interest of the other partner and then figure out how you resolve the conflicts in a friendly and positively oriented way.
And I think that is something urgent which needs to be really reflected, because Europe has lost that art.
Helga Wang Yi also noted that China once offered unconditional support for Germany's reunification, expressing the hope that Berlin would put itself in China's position.
How do you interpret this message?
Well, I think that the history seems to have been forgotten in many circles.
I mean it is a fact that the one China policy was confirmed at the Cairo conference last and the Potsdam Declaration of 1945.
And it is extremely important to remember that, because when the German unification occurred, this was only 40 years after the Second World War.
And I always thought that it showed a great generosity on the side of Russia, but also China, to fully agree with the German unification.
So one would really expect that German politicians today have the same attitude towards Taiwan, which is, according to the United Nations and international law, an undisputed part of China.
Earlier you mentioned, despite all the talks about de-risking, China is still Germany's biggest trading partner.
Companies like Volkswagen and Mercedes-Benz are earning a big share of their global profits in China.
How do you view this deep economic interdependence under the current political narrative of de-risking?
Well, the deep interdependence is a fact and it has benefited both sides tremendously.
The whole discussion about the so-called de-risking came as a result of the pressure from the Anglo-Americans, who first demanded even a decoupling.
This was under the Biden administration and now with Trump's tariff policy.
You know this is continuing in different forms.
But the reality is in Germany, the entire auto market is collapsing, which has many factors.
You know, high energy prices, bad preparation for the e-car market.
But in any case it would be in the sovereign self-interest of Germany to strengthen economic cooperation with China, because it would benefit both sides, as it did before.
If we're looking ahead, Wang Yi called for building a more stable and sustainable policy framework.
In your opinion, what specific elements should such a framework include to ensure that bilateral relations remain resilient to short-term political fluctuations?
I think the most important thing is to rebuild trust, because without trust international economic cooperation cannot function.
And for that, I think it would be extremely useful to find areas of common interest.
For example, long-term investments, like if China and Europe and China and Germany would agree to invest together in the infrastructure development of Africa, which is always the you know, investment in infrastructure is always the precondition for industrialization.
And in Africa, for example, 600 million people have still no access to electricity.
Now in September there was the completion of the great Renaissance dam in Ethiopia, which is a perfect example for such a cooperation and trust building cooperation, because there you had Chinese, Ethiopian
Italian and French firms all cooperating.
And that could be a model because in 2025, there will be 2.5 billion people living in Africa.
That is 1 billion more in 25 years, which means we have to build 1 billion productive new jobs if we want to have a human approach to the migrant crisis.
And I think if China and Germany in particular, but China and European countries, would cooperate in these long-term projects, it would benefit all sides China, Africa and Europe.
If we look at the bigger picture, China and the EU just held what's described an upgraded export control dialogue in Brussels.
What do these upgrades really mean in practice?
And how do you see the progress in China-EU trade and industrial cooperation today?
Well, I think the present difficulties come really as a side effect from the US tariff war against China.
And then, when the Dutch government imposed controls on the chipmaker Nexperia, which is actually owned by China Wintec, China imposed restrictions as a result.
Now.
I think that all reflects a new reality in the strategic situation because this recent dispute between the United States and China on the tariff question, which then was answered by China with the imposition of restrictions on the rare earth metal export,
It just reflects that there is a new parity in the world, where China is not going to be pushed around by anybody.
And there is a simple lesson from that.
In Germany we have a saying which says as one shouts into the wood, into the forest, the same way the echo comes out.
So if Germany would take a friendly attitude towards China or European nations in general, they would take up the many, many offers of cooperation coming from China, then I'm 100 certain that the response would be absolutely friendly.
So it's time for a rethinking of the entire approach of international policies.
I think we have to absolutely learn in Europe to go to a win-win cooperation.
And then you know, if the European countries and the Western countries in general would stop this geopolitical confrontation and just take up the offers, for example, of President Xi Jinping, the Global Governance Initiative and the other three initiatives on security, development and civilizational cooperation, all problems could be solved very, very easily.
And I think that's what we have to try to get to.
Very insightful analysis.
That was Helga Depp-LaRouche, founder of the Schiller Institute, a Germany-based political and economic think tank.
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I'm Elav Elad, economics professor and member of the Data Science and AI Center at New York University, Shanghai.
On the World Today program, you can find in-depth and impartial insight, as well as critical commentary, on key trends in the Chinese economy, financial technology, business and blockchain.
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I'm a professor of public policy and management at Tsinghua University in Beijing.
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Turkey has called on Israel to stop what Ankara calls repeated violations of a ceasefire in Gaza.
Turkish Foreign Minister, Hanke Fidan, made the statement after diplomats from several Arab and Muslim countries met in Istanbul to discuss a UN mandate for an international stabilization force in Gaza.
Fidan said Palestinian self-rule is key to Gaza's future, calling on the international community to support this in the best possible way.
Turkey hosted the foreign ministers from Qatar, Saudi Arabia, the UAE Jordan, Pakistan and Indonesia at the summit.
To dive into this, joining us now in the studio is my colleague Ding Hong.
Thanks for joining us, Ding.
Hello.
The Turkish foreign minister said international pressure on Israel is crucial.
Warning quote-unquote we don't want the genocide to restart in Gaza.
What do you make of this point that international pressure on Israel is essential for Gaza peace?
Well, I do think that without continued sustained international engagement, the Gaza ceasefire will not be able to hold.
Currently, we are seeing the first phase of the 20-point peace plan being implemented, but irregularities have already emerged and things appear to be getting increasingly uncertain.
According to the Hamas-run authority in Gaza, since the ceasefire began last month, Israeli forces have killed more than 230 Palestinians and injured 600 others, citing alleged violation of the ceasefire on the part of the Hamas.
This is raising serious concerns about possible resumption of mass killing in Gaza.
And the thing is, this is only the first phase involving the release of hostages from Gaza and Palestinian prisoners from the Israeli side.
The latter steps required by the peace plan, such as disarmament of Hamas, amnesty for those who have already renounced the violence and rebuilding of Gaza.
These things are likely to encounter even more uncertainties looking to the future.
In particular, I think the disarmament of Hamas will be one of the most difficult and complicated issues.
Currently, no one has any clear idea regarding how that's going to happen.
So sustained international engagement, including putting pressure on Israel, is essential if we want to see a more certain, long-lasting peace for Gaza.
The top Turkish diplomat also noted that all seven countries at the meeting backed giving Palestinians control over Gaza's security and governance.
Why does this principle matter to Turkey and the Muslim community?
So my observation is that, in the words of the Turkish foreign minister, nobody wants to see a new system of tutelage emerge.
So my sense is that, at the end of the day, Gaza is a Palestinian territory, so its destiny must be in the hands of Palestinians.
This principle is endorsed by not only most Muslim majority countries, but also many other countries, including China.
Just think about the widespread global condemnation that followed after US President Donald Trump, sometime earlier this year, suggested that he was mulling over taking over Gaza.
Of course, later he reversed his position.
And even, for example, even Israeli Prime Minister Benjamin Netanyahu understands this very well that while temporary occupation of Gaza is likely, permanent control is unrealistic.
And I think, for Turkey.
Turkey actually played an almost indispensable role in terms of getting Hamas to agree to a ceasefire, to President Donald Trump's plan.
Turkey's foreign minister, Mr Fidan, just held talks over the past weekend with a delegation from Hamas.
And according to Turkey, Hamas is ready to hand Gaza to a committee of Palestinians.
So this gives us a sense on how the thinking is going on with the Hamas side.
So I think, although Palestinians governing Gaza will also face uncertainties and obstacles, such as how far this intra-Palestinian reconciliation might go, but overall this principle represents the most basic consensus for the international society.
We know the US is working with Arab and other partners to shape the international stabilization force to monitor the Gaza ceasefire.
Turkey says it's important the force has a UN Security Council mandate.
Do you think that will happen soon?
Well, one thing we heard from Turkey is that such a mandate could be ready in less than two weeks.
But and I think that's a really big but but it will be delayed if disputes cannot be resolved, including over the question of US military leadership, the relations between this force and the Palestinian civil police force, as well as a timetable for Israeli military withdrawal from the region.
I think, fundamentally speaking, there is still a huge lack of trust between Israel and those Arab and Islamic countries that are involved.
Israel's actions since the ceasefire began last month, including its continued attacks, continued airstrikes on Gaza, have even increased, increased this kind of lack of trust between the two sides.
I mean, these countries are by no means willing to deploy their soldiers, their troops, to a region, to a territory where they will face a very high risk of getting bombed by Israel.
My observation is that, even after this meeting held in the city of Istanbul, many things remain unclear.
We are not necessarily closer to the formation of such an international force, and potential participant countries are still awaiting further details as to the precise definition and requirements of such a force.
Ding Hong, one last question.
Ties between Turkey and Israel have hit an all-time low as a result of the Gaza crisis.
Is this hurting Turkey's ability to bring its influence to bear on the future of Gaza?
Yeah, we do see some severe impacts.
One clear example is that Israel has voiced fierce opposition to any Turkish involvement in this planned international stabilization force.
And Indeed, I think, Ankara has been consistently highly critical of Israel's actions since the Gaza conflict began in October 2023.
On the other hand, some analysts believe Israel might be trying to build support for something hostile against Turkey.
Historically speaking though, Turkey was actually the first Muslim majority country to recognize Israel, in 1949.
But I think between then and now, a lot has changed with regard to how Turkey identifies itself in international affairs.
So we will have to see how things will play out between Israel and Turkey, and again, The close ties that Turkey has managed to maintain with Hamas are a basic and hard fact.
Hamas officials have made regular visits to Turkey, including over the past two years or so.
So, from this perspective, as well as Ankara's regional ambition, I think Turkey do have a key role to play in deciding the future of Gaza.
Thanks for the in-depth perspectives.
That was my colleague Ding Hong.
Coming up.
Peru breaks diplomatic relations with Mexico over asylum claim of a former prime minister.
This is Road Today.
We'll be back.
Welcome.
I'm Elav Elad, economics professor and member of the Data Science and AI Center at New York University, Shanghai.
On the World Today program, you can find in-depth and impartial insight, as well as critical commentary, on key trends in the Chinese economy, financial technology, business and blockchain.
To prepare for the world tomorrow, join me on World Today.
Welcome back to World Today.
The government of Peru has decided to break diplomatic relations with Mexico.
According to the Peru's authorities, former minister Pedro Castillo's government is being granted asylum at the residence of the Mexican embassy in Lima.
The former prime minister is prosecuted for a failed coup attempt in December 2022.
So for more on this, let's bring in Professor Jiang Shixue from College of International Relations at Sichuan International Studies University.
Thanks for joining us, Professor.
Thank you.
Peru says Mexico giving political asylum is a blatant interference, and that's why they cut ties.
In your view, is this an isolated incident or does it reflect a broader escalation of tensions between the two nations?
This is a terrible accident between the two countries.
Now we have to understand why Mexico always offers this kind of political refugee or political asylum to political dissidents.
Well, I think it's based on Mexico's kind of diplomatic tradition.
And also I have to mention that there is Estrada Doctrine, which is quite well known around the world.
This kind of doctrine means there will be a self-determination non-intervention, right of political asylum you see, right of political asylum and then also recognition of de facto governments and also condemnation of war of aggression.
So you can see that there is a tradition based in the diplomacy, the Estrada Doctrine, as well as Mexico's constitution.
So whenever there are some kind of political dissidents, they will seek asylum from Mexico.
So now we have seen this kind of story takes place between Peru and Mexico.
Professor, thank you for the clarification.
But some analysis see this as another sign of the intensifying left-right divide in Latin America.
Beside the asylum itself.
How do you think the left-right clash has shaped this diplomatic crisis and how will regional nations respond to this?
Well, you are right by saying that this has intensified the left-right divide in the whole continent.
But I would like to point out that this is also kind of a political divide in Peru.
Not long ago there was a political crisis and the president was impeached.
So this kind of political turmoil is still going on.
So this incident between Peru and Mexico will intensify the political crisis in Peru.
We know cutting diplomatic ties will hit trade, investment and travel.
Which industries do you think will get hit first?
And for ordinary people, what kind of daily troubles are they likely to notice right away?
Well, in Latin America, I think it is quite common for countries to break out of their diplomatic relationship.
In the past several years, or even past several decades, we have seen this kind of diplomatic crisis quite often.
So I don't believe that international trade people-to-people exchanges might be seriously affected by this kind of diplomatic crisis.
Well, I will point out that this is kind of a business as usual.
Then, looking ahead, what do you think needs to happen for these two countries to get back on a normal relation?
Well, time will settle down this kind of a crisis.
In a few days, in a few months, I think one of the two sides might make some concessions and the other will do the same.
In the end of the day, this kind of political crisis diplomatic crisis will be settled down.
But in the near future, maybe within the next couple of weeks, this kind of political diplomatic tension will continue to move forward.
But in the end of the day, I think in a few months, this kind of crisis will be settled down.
Then looking at Latin America and the wider world, Who do you think could realistically play a mediator role here?
I think the community of Latin America and the Caribbean might do something.
And also probably President Lula of Brazil might step in to do some kind of a mediation job.
So as a matter of fact, I'm not very concerned about this kind of crisis between the two countries.
So don't worry.
And in a few weeks, this kind of crisis will go over.
Thanks, Professor, for your insightful analysis.
That was Professor Jiang Shixue from College of International Relations at Sichuan International Studies University.
Coming up.
US tech giants are slashing tens of thousands of jobs, even as profits rise and AI booms.
We'll take a look at what's really driving this wave of layoffs.
This is World Today.
Stay tuned.
Hello, my name is Alessandro Golombievski Teixeira.
I'm a professor of public policy and management at Tsinghua University in Beijing.
I am a great listener of The Wall Today.
In my opinion, The Wall Today is one of the best China radio programs.
In The Wall Today, we can get the best news and analysis in what is happening now in the world.
So please, come to join us.
You've been listening to World Today.
U.S. tech giant Amazon is cutting up to 14,000 employees.
CEO Andy Jassy says it's not about money, not even about AI, but about culture.
Intel is slashing 24,000 jobs.
Microsoft, Google.
Salesforce, Meta, thousands more.
Tech companies have long been seen as engines of opportunity, innovation, and high-paying careers.
But today, nearly every major firm is trimming staff, even as profits rise and AI investments surge.
What's really going on?
This reset after years of over-hiring.
Is AI quietly taking over more human work than business leaders admit?
With more.
Zhao Yang spoke with Andy Mock, a tech analyst and professor at Beijing Foreign Studies University.
So Andy, Amazon CEO said the company's layoffs are not financially driven, but culture driven.
So what does that really mean in a company of 1.5 million employees?
Yeah, that's a great question, Zhaoyang.
And I think this is a very important question, not just for Amazon, but perhaps companies all around the world that employ so-called knowledge workers or white collar workers.
And I see that there's two dimensions to this.
So one is, of course, Amazon is a tech company and it is an early adopter of a number of transformative technologies from the World Wide Web, which is how Jeff Bezos founded Amazon to sell books online, which at the time, was revolutionary.
To cloud computing.
Obviously, Amazon Web Services is one of the major cloud providers in the United States as well as, I think, in the world.
And then lastly, of course, is AI, which I would say is part of this cultural idea that Andy Jassy talks about.
But there's another aspect of it too, when we think about it culturally, because it is a major publicly listed American corporation.
And that requires a certain culture that, I think, complements being a tech company adopting the latest technologies.
And what that is, is that to show consistent earnings growth every quarter, which usually is done in the name by so-called ETFs. efficiency.
And of course, for a tech company, its biggest cost is people.
So if you can reduce the number of people, increase productivity so you can grow without hiring more people.
That certainly is part of the cultural DNA of companies like Amazon.
And Amazon stock jumped immediately after announcing layoffs.
So why do you think the Wall Street celebrate this layoff message?
You know, as a publicly listed company, it's very, very important to show consistent earnings growth, which is what investors reward.
Because I mean just mechanically or arithmetically, when your profits go up, multiplied by your PE ratio, that raises your stock price.
And I think this is really why investors are happy about this, not only because, you know, we see this across decades.
Every Fortune 500 company says periodically, will show layoffs in order to enhance efficiency, to grow profitability.
But I think what makes investors especially excited now is prospect of AI doing this in a much, much bigger way.
Now, of course, this might not be so great for the people losing their jobs, but if we think about it from an investor capital markets perspective, some believe we could see an enormous boom from AI being applied in large corporations that we might not have seen in our lifetimes and that could justify, you know, tremendous increases in share prices.
And you mentioned the use of AI.
The Federal Reserve Chairman, Jerome Powell, said that many large companies have cut jobs and they cited AI as a reason for layoffs.
And the Federal Reserve is watching that very carefully.
So is the generative AI already replacing jobs or is it more about anticipation?
Well, you know, that's a great question.
And, you know, I think it's hard to have a definitive answer.
But let me share a couple of statistics then with you that I think at least provide some evidence that AI is driving some of this.
So we look at the S&P 500 chart.
In the first quarter of 2025, earnings growth was about 13%, but revenue growth was only about 5%.
So meaning profits were rising faster than revenues.
And we have to then say, what's the reason for that?
And certainly, I think one very plausible explanation is artificial intelligence.
And again, if that is true, of course, the Fed would pay attention to this because again, this could have uh implications for the labor market and it has a dual mandate to fight inflation as well as to um uh manage employment right.
So so yes, you know, i think let's wait and see, but it certainly seems highly suggestive that ai is having a major impact, And a lot of CEOs say AI will support human workers, but job costs are accelerating.
So is there a contradiction?
And which types of roles are most vulnerable to AI or automation right now?
Yeah, that's another great question, Zhao Yang.
And I think it's not either, or especially when we look at large corporations, Fortune 500 corporations or SP 500, say.
Because I think it's actually both.
Because, on the one hand, you know, we've seen, I think very clearly that AI empowers, supercharges high performers.
So we look at coding, for example, and obviously companies like Amazon Microsoft, et cetera a big part of their workforce is involved in actual software development.
That these tools, these copilots can double, triple, quadruple productivity.
So one person that is highly competent can do far more work.
But at the same time, I think we're also seeing the elimination of more mechanical, process-oriented jobs.
So traditionally, what we can think of as middle management people whose job is to organize route information.
And these, I think, are very, very vulnerable and are being replaced.
And I think this again is a cultural – we can call it cultural, a cultural issue as well, because companies like Amazon, as part of their cultural DNA is efficiency, cost reduction.
So again, I think it's not either or, but it's both in that it is making employees more productive.
Those that know how to harness AI will see their earnings increase.
Perhaps their job satisfaction increase as well, because they can do more and higher level and more interesting tasks, while those that are getting really more mechanically process-oriented may find themselves having to transition to another way to add value.
And as AI reshapes the workplace, what skills will help workers stay ahead?
Yeah, and I think that's another very important question.
You know.
Certainly one then, is the skills of learning how to master, harness AI tools to create value for yourself or for the organization you work for.
I think that's certainly one you know.
Another might be in terms of um, you know, what do people want?
And i know there's a big kind of debate going on that you know what's going to happen in a world where ai robots can do everything better than humans.
Uh, that some things.
People will still want humans to provide that service or product, even though it is less efficient precisely because it is delivered by a human.
So that might create new industries, new work opportunities for people.
And I think the people that will benefit are the ones that perhaps are most alert, most flexible and can really identify the opportunities sooner and seize them.
And again, we've seen with the internet that first movers can have tremendous lasting advantage.
And the US tech companies hired aggressively during the pandemic period.
And now we've seen Microsoft, Google, Intel, It seems everyone is cutting back.
So is this simply a correction after the overexpansion or are we seeing a permanent structure shift in tech employment?
Well, you know again John, I think that this is not either or, but I think perhaps both, in that of course, we saw during the pandemic many companies really staffed up and they were hiring as quickly as they can and perhaps lowering standards just to get warm bodies in.
And many of these people, of course, got used to working remotely as well, you know, which many corporate leaders believe really undermines efficiency and cultural cohesion within a company.
So we do see this, I think looking at these over-hiring issues and correcting them, but in parallel, applying AI and then structurally changing the nature of the workforce as well, which includes reducing the number.
And again, reducing the number could be laying people off, but it could also mean growing without hiring as well.
That was Andy Mock, a tech analyst and professor at Beijing Foreign Studies University, speaking with our Zhao Yang.
That's all the time for this edition of World Today.
A quick recap of today's headlines.
President Xi meets Russian Prime Minister in Beijing.
Germany's foreign minister called China and reaffirmed the One China principle.
Turkey hosts summit on Gaza, says Israel must stop ceasefire violations.
Peru breaks diplomatic relations with Mexico over asylum claim of a former prime minister.
U.S. tech giants are slashing tenths of thousands of jobs, even as profits rise and AI booms.
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I'm Gaena in Beijing.
Thank you so much for listening.
Bye for now.
